Debates on sin tax continue to heat up

MANILA, Philippines - The debates on the impact of the sin tax reform measure continue to heat up between those who are in favor and against the newly approved bill.

According to anti-sin tax groups, which circulated newspaper advertisement titled “Kill Bill,” once the new legislation is signed into law and implemented, it would displace workers and kill the tobacco industry.

However, the non-government Action for Economic Reforms (AER) debunked these allegations.

In a statement, Miguel Ragos from AER cited a research data from the Bureau of Labor and Employment Statistics which showed that the largest labor displacement, a total of 827 displaced workers, in the industry occurred in 2011, a year after the merger of Phillip Morris and Fortune Tobacco

“Employment statistics on tobacco industry show that tax increases and economic shocks in the past did not result to massive layoffs.”

Nonetheless, he said that should there be displaced workers, the final version of the sin tax bill contained transitory provisions that provides for the financing of unemployment alleviation program.

Meanwhile, Dr. Antonio Dans of the UP College of Medicine, said the final version of the bill would decrease smoking prevalence 27.06 percent in the first year from a stagnant 31 percent.

“This is bigger than the revenue we will be earning from the tax. This is our biggest win,” said Dans.

Furthermore, he said this would translate to an estimated 63,000 lives saved and help at least two million smokers break the habit.

In a press conference yesterday, Ragos compared cigarette prices in the Philippines to prices in other countries.

He noted even after a P30 tax increase, the price of the most sold brand will still be one of the lowest in the region.

“How can smuggling intensify when our prices are still lower?” Ragos pointed out.

At the same time, he said the issue of smuggling remains a valid problem, which the sin tax reform measure also seeks to address.

“The final version of the bill was designed to contain anti-smuggling measures such as export bonds, internal revenue stamps and unique identification markings,” Ragos said.

Dans, meanwhile, showed that there were 600 excess deaths a year from cancer and 2,000 excess deaths a year from heart disease in tobacco-producing regions.

Furthermore, Dans said that the measure would allocate funds for Universal Health Care that would cover those in the lowest percentile in terms of income.

“Tobacco farmers are among the poorest in our country. The farmers will actually benefit from this measure,” he said.

Congress has approved a sin tax measure that would yield P33.96 billion in incremental revenues in the first year of implementation.

Only the signature of President Aquino is needed for it to become a law.